Forecast: Analysts Think Day One Biopharmaceuticals, Inc.'s (NASDAQ:DAWN) Business Prospects Have Improved Drastically

Celebrations may be in order for Day One Biopharmaceuticals, Inc. (NASDAQ:DAWN) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The analysts greatly increased their revenue estimates, suggesting a stark improvement in business fundamentals.

Following the upgrade, the current consensus from Day One Biopharmaceuticals' ten analysts is for revenues of US$162m in 2025 which - if met - would reflect a sizeable 58% increase on its sales over the past 12 months. Losses are supposed to balloon 29% to US$1.08 per share. Yet before this consensus update, the analysts had been forecasting revenues of US$134m and losses of US$1.83 per share in 2025. We can see there's definitely been a change in sentiment in this update, with the analysts administering a sizeable upgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

View our latest analysis for Day One Biopharmaceuticals

There was no major change to the consensus price target of US$36.67, perhaps suggesting that the analysts remain concerned about ongoing losses despite the improved earnings and revenue outlook.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Day One Biopharmaceuticals' revenue growth is expected to slow, with the forecast 45% annualised growth rate until the end of 2025 being well below the historical 119% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 21% per year. So it's pretty clear that, while Day One Biopharmaceuticals' revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

The Bottom Line

The most important thing here is that analysts reduced their loss per share estimates for next year, reflecting increased optimism around Day One Biopharmaceuticals' prospects. Fortunately, analysts also upgraded their revenue estimates, and our data indicates sales are expected to perform better than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to next year's earnings expectations, it might be time to take another look at Day One Biopharmaceuticals.

That's a pretty serious upgrade, but shareholders might be even more pleased to know that forecasts expect Day One Biopharmaceuticals to be able to reach break-even within the next few years. For more information, you can click through to our free platform to learn more about these forecasts.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.